Business

What Is SME Finance And How Can You Benefit From It?

SME finance can be the solution that you have been waiting for. Small and middle-sized businesses are essential to the economy in India, accounting for almost 90% of all companies globally. However, although there is a huge demand for credit in the small and medium business sector, SMEs have not been able to take full advantage of its benefits. There’s a reason why more than 6.33 crore micro, small and medium businesses are not financially strong: their access to investment. Loans from banks are time-consuming and expensive. SME loans allow you to get a larger sum on smaller interest rates as compared to securing the funds from the bank. The main issue that businesses face while applying for SME loan is lack of credibility. According to SME Ministry’s 2019 annual report, on an average there are 25.3 lakhs loan applications registered daily in all banks combined. Out of this approximately 5.5 lakhs are registered by SMEs and only 1 crore SME loans were sanctioned/released by banks in FY 2018-19. This clearly indicates how bad the crunch for SME loans is.

In recent years, with a growing focus to strengthen SME sector in India, the government has taken several initiatives. An example is one of the major initiatives taken by the Ministry – Pradhan Mantri Mudra Yojana (PMMY). Since its launch in 2015, it has witnessed consistent growth, and has now become one of the most recognized lending initiatives for SMEs worldwide. It’s been designed to facilitate the flow of credit from both, Banks and NBFCs to the SME sector and an additional investment worth Rs 2.97 lakh crore was witnessed between April 2015 and March 2018.

Why Do You Need An SME Business Loan?

An SME business loan can be the opportunity an SME needs to grow. SME loans are similar to start-up business loans, but are more tailored for the specific needs of an SME. This can include borrowing against unpaid invoices, a cash flow loan or business starts up loan to buy equipment or pay for marketing. An SME loan may be just what an SME needs to get up and running. Take advantage of the new opportunities available to you and make your dreams a reality with Perdana SME loans today. With the Small and Medium Enterprise business loan from Muthoot FinCorp, you can unlock opportunities to grow your business. This loan has a tenor of five years and does not charge any prepayment penalties. You may use this loan for working capital or any other business related expenses such as hiring or retaining employees, inventory expenses, marketing or consultant fees. 

SME Finance Benefits

As mentioned above, an SME business loan has requirements that a small business can meet much more easily than a regular business loan. It is designed specifically to support SMEs.

Here are some of the SME Finance benefits:

Low Documentation Needs 

With a low documentation needs SME business loan from Bank of Baroda, you can get the money you need to meet working capital needs, for projects and expenses. Because we understand the financial needs of small and medium-sized businesses, we can assist you with SME business loans that have flexible tenures for repayment. To find out more about our SME financing, contact to one of our customer service executives will walk you through the application process. 

Collateral-free

Whether you use it to expand, grow or invest in your business, our Collateral-free SME Business Loan is the right choice. It is available for any type of SME businesses. You can apply directly over the phone with one of our financing consultants or visit one of our branches. If you are in the early stages of business, Muthoot FinCorp offer other products like “micro finance in indiathat may help you get your business established.  With so many financial institutions offering SME loans to Indian entrepreneurs, choosing the right one can be daunting. SME Loans becomes your partner in growing your business thanks to our transparent pricing structure. We offer flexible repayment terms to help maximise cash flow and make it easier for you to access necessary funding. The SME Loan product is suitable for small businesses that need cash for day-to-day operations, expansion or working capital. It also offers a window of opportunity for business owners who have difficulty accessing credit through other channels.

Flexible Tenure

The tenor of a SME loan is defined as the duration for which the loan will run, or in other words, how long it will take you to repay the entire amount. Tenures usually range from one month to 36 months. For instance, you may opt for one-month tenure because your business needs quick cash in order to finance working capital requirements. On the other hand, three-year tenure might be better suited for SMEs that wish to finance more long-term projects. Your repayment schedule is also flexible – weekly, monthly or bi-monthly. The financial institutions of a country play a crucial role in the success of its business community because they provide access to credit. For instance, SMEs based in Indonesia must often be cautious about the loans taken. This is because credit can be given only after careful verification of returns and credit history. However, banks in Indonesia are offering SME Loan to entrepreneurs who wish to expand their business. This is how our organization aims to make an effective contribution towards the country’s economy by helping thousands of entrepreneurs with flexible tenures.

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